Attachment A
Supplemental Instructions
for the Appraisal of the Fair Market Value of Land
The following information and instructions will be used by the City when setting the land value used in the formula for determining the impact fees due in lieu of park and recreational land dedication pursuant to Santa Clara City Code 17.35. (Approved by Santa Clara City Council—June 7, 2016)
Background.
On July 15, 2014, Council added Chapter 17.35 “Park and Recreational Land” to the Santa Clara City Code to ensure that new residential development provides adequate community and neighborhood park land for active recreational uses and/or pays a fee in-lieu of parkland dedication to mitigate the impacts of the new growth pursuant to the California Quimby Act and/or Mitigation Fee Act.
17.35.040 Formula for calculation of fee in lieu of land dedication. (a) When a fee is required to be paid in lieu of parkland dedication, the maximum amount of such fee shall be determined by the fair market value of the amount of land that would otherwise be required to be dedicated pursuant to SCCC 17.35.030, as set forth below. The date of valuation of the property for in-lieu fee purposes shall be the date that the City determines that the developer’s application for a parcel map or tentative subdivision map, or application for projects not involving a subdivision, is complete.
(b) Fair Market Value.
(1) The City shall determine the fair market value of the property by using the average per acre land value for property in the City of Santa Clara, based upon a survey of land values and sale records in the City. The City Council shall set a minimum of three such average values, one for each of the three existing Zip Codes in the City (95050, 95051, 95054). The City Council may, at its discretion, set average values for additional subregions of the City. The City Council shall review the fair market values not less than annually and set the values in a Council resolution. (2) If the developer objects to this determination of fair market value, the developer may elect to have the value established by appraisal. If the developer chooses this option, the developer shall deposit with the City an amount sufficient to cover the cost of an appraisal, which the City shall conduct. The appraisal shall be completed prior to approval of the tentative or parcel map or, for developments not involving a subdivision, prior to the issuance of a building permit. (c) Based on the determination of fair market value set forth in subsection (b)(1) of this section, for each of the dwelling unit categories, the City Council shall set the amount of fees to be paid in lieu of parkland dedication in a Council resolution, which the Council shall review annually. (Ord. 1928 § 3, 7-15-14).
Attachment A—Supplemental Instructions for Appraisal Page 1 of 3
Guidelines for Appraiser:
a. Appraiser is to provide a “Fair Market Value” for an average acre of land (hypothetical, rectangular, useable site) for property in each of the three existing City of Santa Clara Zip Codes 95050, 95051, 95054. The opinion will conform to Uniform Standards of Professional Appraisal Practice.
b. Valuation Date: December 31 of each year.
c. Location & Property Sales Data Set Boundaries: Data set will begin with sales data from within Santa Clara City limits.
d. Data Set Date Range: Use data from January 1
st to December 31st of each year.
Example: January 1, 2015 to December 31, 2015 for “December 31, 2015 Valuation Date.” See contingencies below.
e. Property Types: Use all of the following property types: Single Family (low and very low density), High Density Residential, Medium Density Residential, Commercial, Industrial, Lots and Land.
f. Contingencies for Limited Data Set of each Property Type: If there are insufficient, credible data points or sales of a particular property type, then appraiser will explore and use comparable sales from the local competitive market area, adjacent to City of Santa Clara. A fixed distance from City of Santa Clara city limit is not given, however a compelling, rational basis for the selection of the competitive market area must be given by the appraiser in the report. Preference is for closer, more recent, and comparable; discretion is given to the appraiser.
g. Sales Transactions Data not to be used: Do not use transactions if they are not an arms-length transaction, have encumbered/clouded title, are environmentally impaired site, or are more than three (3) years old.
h. Inflation factors for Comparable between 1 and 3 years: An inflation factor will be computed and applied to comparable sales over one year based on reasonable and rational considerations such as sales and rental trends or other appropriate methods.
i. Sales Transactions Data that may be included: May use real estate sales transactions by the City of Santa Clara for additional neighborhood or community parkland.
j. Data Values excluded: No values or set of values at the high or low end of the data set are to be excluded from consideration in the average values on the sole basis of being relatively high or low; however, a check for consistency among comparable values will be done, and a rational basis should be provided for credible comparable transactions if not used.
Attachment A—Supplemental Instructions for Appraisal Page 2 of 3
k. Research Factors to be considered for Comparable sales: The factors to be used to compare property values include, but are not limited to physical factors, economic factors, market conditions verification to parcel maps, public records, CoStar data bank. Additional factors may be used provided there is a rational basis for doing so.
l. Reconciliation of value differences: The approach will be comparative, iterative, qualitative and quantitative, and will be made at the appraiser’s discretion.
m. Weight to be applied to Property Types: The weighted average of each property type will be based on the percentage of land area in the sales transactions, for example, if 25% of total acreage is high density residential, then the relative weight of that property type will be 25%. (The weight will not be done by the quantity of sales of each type or the percent of value of sales of each type).
n. Reporting: A draft valuation report will be generated by March 15. City will provide for a two week circulation and comment period. The valuations included the final valuation report will be used in the calculation formula for fees prepared by staff to be reviewed by Council as part of the annual City budget process and Municipal Fee Schedule adoption by June 30. Fees will be implemented on or after July 1 depending upon Quimby Act or Mitigation Fee Act provisions of the Council resolution.
Attachment A-Supplemental Instructions for Parkland Dedication In Lieu Fee Process and Schedule 2016
Attachment A—Supplemental Instructions for Appraisal Page 3 of 3